South of Fraser communities from Delta to Langley will now be considered for a new casino to replace the South Surrey proposal narrowly rejected by Surrey council.

B.C. Lottery Corp. president and CEO Michael Graydon said a call for expressions of interest from nearby communities is likely that would include White Rock and First Nations such as the Semiahmoo band, which has indicated some interest.

"If you circle that South Surrey/White Rock area, we would certainly entertain any opportunities in communities like that," he said Tuesday. "We're very open to any opportunities that may potentially exist now that Surrey has decided they don't want it."

Graydon said BCLC would then look at transferring the gaming licence for slots Gateway Casinos holds at the former Newton bingo hall in Surrey to the new site to "recreate what they were trying to do in South Surrey."

The Semiahmoo reserve is just across Highway 99 from the rejected site and would have some of its benefits – notably proximity to the border to intercept some Canadians who will otherwise gamble in the U.S.

But Graydon cautioned the reserve would require sewer and water infrastructure upgrades to service a four-star hotel and he was unsure adequate land could be assembled in nearby White Rock.

A new site would be picked based on how well it would tap demand from local gamblers without unduly competing with existing casinos, Graydon said. Other considerations would include whether strong infrastructure is in place and how much capital investment would be required.

Some casino opponents at last week's public hearings argued the $100-million casino/entertainment project with 600 slot machines should be located further north, either in an industrial area like Port Kells or close to SkyTrain access.

But Graydon ruled out northern sites near Highway 1 as being too close by road to existing casinos such as Boulevard, Starlight and Grand Villa.

He said Gateway may also want to consider a larger expansion of its Cascades casino and convention centre in Langley City instead of a new site.

It could also opt to keep the Newton licence and seek to fully develop it as a community gaming centre, he added.

But Graydon said Surrey council's surprise 5-4 rejection means BCLC will not consider any new site in Surrey at this time, echoing earlier comments by gaming minister Rich Coleman.

"Surrey's very difficult to deal with unfortunately because of what we've just been through," Graydon said. "I just don't feel we have a level of comfort in dealing with the city at this particular time based on what we've just experienced."

He said he respects opposing councillors who clearly signalled their objections to a casino far in advance, but scolded Mayor Dianne Watts in particular for casting the deciding vote against the casino after giving no sign of having second thoughts up to that point.

He said he was "dismayed" to read statements by Watts this week that she began harbouring doubts about the project starting last fall.

"If that was so I wish she would have respected our relationship enough to bring those concerns to the forefront," Graydon said. "She didn't and we never really heard any concerns on this proposal. All we heard was support going forward.

"I don't know what changed at the last minute," he added. "Hopefully some day Mayor Watts will take the time to articulate it to us so that we can move on and learn from the experience."

Graydon said the project was a good fit with Surrey's long term vision for the Highway 99/Morgan Crossing area and that local opposition was "mild" compared to other proposals BCLC has championed.

BCLC estimated it would have captured up to $30 million a year in betting by B.C. gamblers who now go across the border to the nine U.S. casinos between here and Seattle.

He also said an expansion of Fraser Downs racetrack/casino in Cloverdale wouldn't be an option because it's owned by rival Great Canadian Gaming and past assessments have concluded it wouldn't generate a strong enough return on the required investment.

The decision came just over two years after Vancouver rejected a giant casino downtown beside BC Place to replace the Edgewater casino.

BCLC is still preparing to relocate the Edgwater casino to BC Place without an expansion in gaming.

Asked if the North Shore – previously identified by BCLC as B.C.'s largest market without gambling facilities – could host one new casino, Graydon said it was unlikely.

A community gaming centre on the North Shore may be proposed, he said, but called the market too small to support a full-size casino, noting the relocated Edgewater casino will be on transit and well positioned to serve the area.

First Nations host some gaming centres in B.C., including one on the Sea-to-Sky highway near Squamish, and receive 10 per cent of gaming profits in the same way as other host communities.

Surrey would have received an extra $3.1 million in gaming profits per year, nearly doubling what it now receives from Fraser Downs and Newton.

The province took in more than $1.5 billion in slot machine and table game revenue from casinos in 2011-12.

B.C. now has more than 9,700 slot machines at 17 casinos and more than 2,100 slots at various community gaming centres.

Delta, Langley mayors react to casino prospects

Delta Mayor Lois Jackson is betting her residents would be strongly opposed to any new casino proposed in one of their neighbourhoods.

"I think we'd have a lot of opposition to it," she said after BCLC CEO Michael Graydon said Delta may be one option.

"On the basis of my own gut feeling, I would prefer not to have one in my community. I know they're a wonderful cash cow, but money isn't everything."

Jackson said there are already "a lot" of casinos in the Lower Mainland.

Langley City Mayor Peter Fassbender said it's too early to tell whether his community and council might support a gambling expansion at Gateway's Cascades casino if it was accompanied by an expansion of other facilities there.

He said the hotel isn't big enough to attract larger conventions and the theatre can't be used by those under 19 because the only access is through the casino.

"We're not simply looking for an expansion of our casino," he said. "The hotel expanding, the conventon centre expanding, the theatre expanding and being accessible to more of the community – those might all be pieces of the puzzle."

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